Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 5%return from its investments.Initial investmentNet cash flows in:Year 1Year 2Year 3Project X2Project X1$ (112,000)$ (184,000)41,00084,00051,50076,50074,00064,000Compute the internal rate of return for each of the projects using Excel functions. Based on internal rate of return, indicate whethereach project is acceptable.Note: Round your answers to 2 decimal places.Project X1Project X2IRRAcceptable?% Yes% Yes

Step 1:Finding the rate of discount that will allow the present value of the total of the yearly…

Answered: Following is information on two…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Duo Corporation is evaluating a project with the following cash flows: Year Cash Flow 0-$ 16,100 1 7,200 2 8,400 3 8,000 4 6,800 5 -4,200 The company uses an interest rate of 11 percent on all of its projects. Calculate the MIRR of the project using all three methods. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Discounting approach. % Reinvestment approach % Combination approach 16.46%
Profitability index. Given the discount rate and the future cash flow of each project listed in the following table, use the PI to determine which projects the company should accept. What is the PI of project B?(Round to two decimal places.) Cash Flow Project A Project B Year 0 −$1,800,000 −$2,400,000 Year 1 $500,000 $1,200,000 Year 2 $600,000 $1,100,000 Year 3 $700,000 $1,000,000 Year 4 $800,000 $900,000 Year 5 $900,000 $800,000 Discount rate 5% 17%
Phoenix Company is considering investments in projects C1 and C2. Both require an initial investment of $270,000 and would yield the following annual net cash flows. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Net cash flows Project C1 Project C2 Year 1 $ 26,000 $ 110,000 Year 2 122,000 110,000 Year 3 182,000 110,000 Totals $ 330,000 $ 330,000 a. The company requires a 10% return from its investments. Compute net present values using factors from Table B.1 in Appendix B to determine which projects, if any, should be accepted.b. Using the answer from part a, is the internal rate of return higher or lower than 10% for (i) Project C1 and (ii) Project C2? Hint: It is not necessary to compute IRR to answer this question.
Doak Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 -$32,600 1 11,520 2 14,670 3 11,270 4 10,940 5 -4,230 The company uses an interest rate of 10 percent on all of its projects. Calculate the MIRR of the project using all three methods. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Discounting approach % Reinvestment approach % Combination approach %
Following is information on two alternative investments. Beachside Resort is considering building a new pool or spa. The company requires a 10% return from its investments. Initial investment Net cash flows in: Year 1 40,000 Year 2 56,000 Year 3 80,295 Year 4 90,400 Year 5 65,000 Compute the internal rate of return for each of the projects using excel functions. (Round your answers to 2 decimal places.) Pool Spa IRR Pool Spa $ (160,000) $ (105,000) % % 32,000 50,000 66,000 72,000 24,000
Below are four cases that you will have to solve using Excel spreadsheets. 2nd case The COMPETIDORA SA company has the possibility of investing in three different projects . The projections show us the following information on which a decision must be made: PROJECT X Y Initial Z$310,000 It is requested: investment $180,000 $250,000 Year 1 cash flows $50,000 $80,000 $150,000 1. Determine the internal rate of return. 2. Determine the present value. Year 2 cash flows 3. Determine the recovery period. 4. Define which is the most viable project. $70,000 $80,000 $120,000 The discount rate for the project will be 9% and the investors propose a MARR of 22%. Year 3 cash flows $80,000 $80,000 $100,000 Year 4 cash flows $100,000 $80,000
When inputting an answer, round your answer to the nearest 2 decimal places. If you need to use a calculated number for further calculations, DO NOT round until after all calculations have been completed. For the final answer, Round to 2 decimal places. A firm has a WACC of 8.35% and is deciding between two mutually exclusive projects. Project A has an initial investment of $63.06. The additional cash flows for project A are: year 1 = $17.78, year 2 = $38.17, year 3 = $46.29. Project B has an initial investment of $72.12. The cash flows for project B are: year 1 = $52.25, year 2 = $37.11, year 3 = $33.12. Calculate the Following: Payback Period for Project A: Payback Period for Project B: NPV for Project A: NPV for Project B: If can't solve all pls skip it i dont need your answer then i wil definitely like for complete answer and skip if you can't.
Duo Corporation is evaluating a project with the following cash flows: Year Cash Flow 0 −$ 15,200 1 6,300 2 7,500 3 7,100 4 5,900 5 −3,300 The company uses an interest rate of 12 percent on all of its projects. Calculate the MIRR of the project using all three methods. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
Use the information below to answer Question#40: GIVEN: The XYZ Company is considering the following project with its corresponding financial data. The Company requires a 9% return from its investments. $ 500,000 $ 200,000 $ 225,000 $ 245,000 Initial investment: Expected Cash in-flow Year 1: Expected Cash in-flow Year 2: Expected Cash in-flow Year 3: Present Value Factor of 1 at 9%: n=1: 0.91743 n=2: 0.84168 n=3: 0.77218 40) Choose from one of the following that accurately depicts this decision: A) This investment should not be considered because NPV is a negative $62,048 B) This învestment should be considered because NPV equals positive $62,048 C) This investment should be considered because the IRR for this investment is obviously less than its Required Rate of Return D) B and Care both correct
Duo Corporation is evaluating a project with the following cash flows: Year 0 Cash Flow -$ 16,600 1 7,700 2 8,900 3 4 5 8,500 7,300 -4,700 The company uses an interest rate of 11 percent on all of its projects. Calculate the MIRR of the project using all three methods. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Discounting approach Reinvestment approach % % Combination approach %
Morrisey Company has two investment opportunities. Both investments cost $6,900 and will provide the same total future cash inflows. The cash receipt schedule for each investment is given below: Investment I Investment II Period 1 $ 1,950 $ 1,950 Period 2 1,950 3,140 Period 3 2,950 4,330 Period 4 5,520 2,950 Total $12,370 $12,370 What is the net present value of Investment Il assuming an 12% minimum rate of return? (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round your intermediate calculations. Round your answer to the nearest whole dollar.) Multiple Choice $2,301 $9,201 $12,370 $(8,903)
The management of NUBD Co. is considering three investment projects-W, X, and Y. Project W would require an investment of P21,000, Project X of P66,000, and Project Y of P95,000. The present value of the cash inflows would be P22,470 for Project W, P73,920 for Project X, and P98,800 for Project Y. Rank the projects according to the profitability index, from most profitable to least profitable. *

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